What to you if you are an Executor

If you are an Executor of a deceased person’s last will and testament, you should take great care in fulfilling your duties. You are required to collect the assets, pay liabilities and distribute the estate in accordance with the deceased’s last will and testament. The recent decision of the New South Wales Supreme Court in Parsons v Davison [2016] NSWSC 1491, highlights the duties of an executor and the serious consequences in failing to carry out these duties.

Example

The deceased appointed his brother as Executor in his last will dated 2 July 1990 (“Deceased’s Will”) and the Executor’s three (3) children as the sole beneficiaries of the deceased’s estate. The Executor obtained Probate of the Deceased’s Will in March 2011, however a further four (4) years had passed and the administration of the estate had still not been completed. The Beneficiaries of the Deceased’s Will applied to the Supreme Court to have the Grant of Probate revoked on the grounds that the Executor had failed to promptly and properly administer the estate.

Executor was personally held liable

The Court considered the Executor’s conduct during the course of the administration which included:

The Executor had not sold or transferred to the beneficiaries the estate;

The Executor paid himself a large commission from the estate without the consent of the beneficiaries;

The Executor had lived rent-free in one of the deceased’s properties for approximately four years;

The Executor claimed that he was entitled to a third interest in the deceased’s company shares; and

The Executor failed to keep proper accounts of the estate.

The Court held that given the Executor’s above conduct, the Executor was not a fit and proper person to carry out the duties involved in the due administration of the estate and should be removed of his duty as Executor.

In addition to revoking the Executor’s Grant of Probate, the Executor was held personally liable to pay the Beneficiaries legal costs of the application and his own legal costs in the matter.

This case demonstrates that an Executor cannot take as long as they wish to administer an estate

Implications for executors and beneficiaries

This case demonstrates that an Executor cannot take as long as they wish to administer an estate without a reasonable explanation and must ensure that they keep adequate records and accounts.